"The growth of annual box office receipts is mainly driven by the continuously accelerated establishment of theaters across the country, as well as the improved quality of Chinese movies," said Yang Shuting, senior analyst with Beijing-based EntGroup Consulting.

By the end of 2013, the number of theater screens in China stood at 18,195, an increase of 5,077 screens over the year before, the report said.

"Based on a survey of theater expansion conducted at the end of 2012, we expected China's theater expansion would enter a plateau within three to five years, with the total number of screens reaching 30,000," Yang said.

But Liu Hanwen, director of the Film Institute Development Research Center at the State Administration of Press, Publication, Radio, Film and Television, said it is hard to gauge when the number of cinemas will be enough to satisfy audience demand, as China is undergoing a sped-up urbanization, which has propelled demand among the moviegoing public.

The highest-grossing film last year was Stephen Chow's Journey to the West: Conquering the Demons, which raked in 1.25 billion yuan at the box office.

Among the top 10 films in terms of box office revenue, seven were homegrown productions, with the Hollywood movie Gravity coming in 10th with ticket sales of 435 million yuan.

"The current priority for Chinese filmmakers is to improve the quality of domestic movies instead of seeking more cooperation with Hollywood counterparts," said Liu, "and they shouldn't put too much emphasis on box office market share competition with imported movies."

In 2012, domestic films accounted for 48.46 percent of the market, taking in 8.27 billion yuan at the box office.

But during one of the traditionally busiest times for film releases - between mid-November and early January - the movie market in 2013 was weaker than in the previous year.

During the period last year, a total of 35 films were released, generating 3.63 billion yuan in ticket sales.

But a year later, during the same period, only 30 films were released, selling 2.56 billion yuan worth of tickets, a year-on-year decrease of 29.6 percent, according to statistics from EntGroup Consulting.

"This could be one of the reasons why the actual annual box office figure in 2013 failed to meet our previous estimates of 22 billion yuan," said Yang.